Entrepreneurial Firms Research Articles

Does managerial overconfidence affect capital structure rebalancing for entrepreneurial firms?

PurposeThe behavioural theory adds a new paradigm of analysis with the assumptions of the decision maker’s cognitive biases and their repercussions on financing decisions. The aim of the study is to analyse the repercussions of these biases on the adjustment speed of firm’s capital structure toward the optimal level.Design/methodology/approachBased on a partial adjustment model, the study uses the Dynamic Panel Fractional estimator to analyse panel data from 4,990 Portuguese entrepreneurial firms.FindingsThe results show that the cognitive overconfidence bias impacts the entrepreneurial firm’s capital structure. In fact, the firms run by overconfident managers adjust more slowly than their counterparts. Furthermore, the findings suggest that entrepreneurial firms make relatively fast adjustments toward the optimal debt level and follow a hierarchical financing order in the funding process.Practical implicationsThe results of this paper are not only interesting to the academia, but also contain practical implications for corporate, institutional and business policy and governance. First, the paper introduces a new measure of cognitive bias in optimistic managers, which is useful for current and future academic research. Also, in practical terms, the findings of the paper reveal that when a company is contemplating hiring a manager, it should consider whether they need an optimistic or non-optimistic manager based on the company's present life cycle or situation.Originality/valueThe current analysis extends the existing literature. The study suggests that financial classical and behavioural paradigms should not be separated, which can provide evidence to help narrow the gap between these two major perspectives.

Sustainability and resilient strategies by entrepreneurial firms in a VUCA world

Sustainability and resilient strategies by entrepreneurial firms in a VUCA world

Can Entrepreneurial Marketing Provide an Economic Moat for Small and Emerging Firms?

This study explores the economic moat concept, which has become increasingly relevant to modern-day businesses seeking a sustainable competitive advantage. Drawing upon Porter's Five Forces Model, we investigate the potential for economic moats in small companies and emerging entrepreneurial firms. By analyzing examples of narrow economic moats in small firms, we provide insights into the strategies that may help these firms build and maintain a competitive advantage in their respective markets. Our findings suggest that entrepreneurial firms can leverage various sources of competitive advantages, such as customer loyalty, low-cost structures, and network effects, to create narrow economic moats that protect against competitive threats. Case studies of Andy’s Hobby Headquarters and Laura Farms illustrate how small firms can successfully cultivate narrow economic moats aligned with Porter’s Forces. Andy’s strategic evolution from a local hobby shop to a national and international destination, coupled with a strong online presence and community engagement, demonstrates how management actions can foster customer loyalty and differentiation. Similarly, Laura Farms leverages social media to project company values and create emotional ties with viewers, establishing a narrow economic moat. This paper offers practical insights for entrepreneurs and small business owners seeking long-term success in today's highly competitive business environment. Finally, it concludes that deliberate management strategies, particularly in marketing, can facilitate the development of economic moats within competitive environments and substitution pressures. By adjusting traditional definitions of economic moats to accommodate the rapid pace of entrepreneurship, it advocates for further research into the relationship between economic moats and sustained profitability among entrepreneurial ventures.

A mediated moderated analysis of knowledge management and stakeholder relationships between open innovation and performance of entrepreneurial firms

Even though entrepreneurial firms make substantial contributions to both domestic and global economies and innovations, there is disagreement in the literature regarding how open innovation affects these firms' ability to succeed. The current research is an attempt to address the gaps by analyzing the intricacies and dynamics of entrepreneurial firms’ involvement in Open Innovation. Furthermore, the impact on performance is examined from a knowledge perspective. In Jordanian context, this study analyzed the link between stakeholder interactions, knowledge management, open innovation, and the performance of entrepreneurial firms. The findings demonstrated that open innovation activities are statistically significant to the overall performance of entrepreneurial firms. However, since it has an unintentional detrimental effect over the performance of entrepreneurial firms in Jordan, the moderating effect of stakeholder relations and the mediation effect of knowledge management has been analyzed. The moderating role of stakeholder relationships has been proven statistically which enriched the theoretical foundations of RBV and contingency theory by adding stakeholders’ theory into the combination of the two theories, at the end limitations and guidelines for future research along with practical implications are emphasized.

A Grounded Theory Approach to Technology Adoption in SMEs: An Analysis of Handicraft Companies in Morocco

Purpose – Technology is considered a tool of competency enhancement and a source of innovation and competitive advantage for small and medium-sized enterprises (SMEs). Although many studies examined the drivers and barriers of technology adoption in SMEs, little is known about handicraft companies (HCs) operating in emerging market settings. This paper aims to analyse and better understand HCs’ attitudes and behaviours towards technology implementation. Design/Methodology/Approach – We conducted an in-depth qualitative analysis to uncover the idiosyncratic experiences related to new technology adoption in HCs located in Morocco. We drew on the underlying principles of grounded theory approach because it allows for new realities and novel interpretations of complex phenomena to emerge directly from the field. Findings – We developed a grounded theory of technology adoption in HCs operating in emerging market settings. This resulted in the identification of a comprehensive process that managers rely on before deciding on a new technology, which is composed of three stages: (1) need recognition, (2) technology approval, and (3) adoption decision. We have also uncovered the intervening conditions that play a crucial role in technology-related decision-making at each stage. Practical Implications – Our study could help managers to gain an in-depth understanding of the intricacies associated with technology adoption in HCs and to be better equipped when attempting to implement new technologies in their own entrepreneurial firms. Originality/Value – This research goes beyond the mere identification of obstacles and motives of technology adoption by advancing a well-defined framework for usage in the understudied handicraft sector in emerging market settings.

Entrepreneurial firms and their foresightedness in a VUCA world

Entrepreneurial firms and their foresightedness in a VUCA world

Различия в инновационном поведении субъектов малого и крупного бизнеса

The authors of the article studied the specifics of innovative behavior of enterprises depending on their size. This specificity was determined in accordance with the following areas of the company’s activities: personnel policy, search for sources of financing, search for market niches, production of innovative products (determined by the nature of the innovations produced and the level of innovative mobility), search for partners and contractors, placement of financial responsibility centers. In preparing the article, a system analysis methodology was used, based on a set of theoretical and empirical research methods, the key of which is the case-study method, based on the results of content analysis, as well as expert interviews and a questionnaire survey. The analysis showed that the qualitative results of the activities of small and medium-sized innovative businesses often have a greater impact on the economic development of the region than large ones. The results obtained during the study have both scientific and practical significance. At the level of regional authorities, understanding the specifics of the innovative behavior of entrepreneurial firms is important from the point of view of determining measures of state support for innovatively active enterprises.

Optimal Operations of Entrepreneurial Firms under Time-Inconsistent Preferences

Optimal Operations of Entrepreneurial Firms under Time-Inconsistent Preferences

Exploring How the University Ecosystem Can Mobilise Resources for Social Innovation and Entrepreneurship: Knowledge-Intensive Entrepreneurial Firms in Sweden

Social innovation and entrepreneurship are argued to be crucial for enabling inclusive and sustainable transformation. However, we know less about how universities can enable social innovation and entrepreneurship amongst students and employees. This article explores one specific channel for university impact - supporting knowledge-intensive entrepreneurs (KIE) in delivering social innovation as services. We conduct a theoretically informed case study at the University of Gothenburg, Sweden, analysing one firm started by alumni and one firm started by employed researchers. We propose a conceptual framework, explicating how social KIE entrepreneurs mobilise resources from the university in knowledge-intensive services of social impact.

Blockchain revolutionizes entrepreneurial and marketing capabilities in health tourism

ABSTRACT The benefits of blockchain technology in the tourism industry have increased tourist satisfaction by enhancing security, eliminating existing intermediaries, and improving transparency. This study aims to investigate the effects of blockchain technology benefits on entrepreneurial capabilities, marketing capabilities, and marketing performance of hospitals operating in the health tourism industry. This research applied descriptive-analytical survey used convenience sampling to enrol 187 marketing managers working in medical centres and private hospitals active in the Iranian health tourism industry. The data were collected using the field (questionnaire) method, and analysed in SmartPLS using the partial least squares structural equation modelling (PLS-SEM) method. Blockchain technology benefits had significant positive effects on entrepreneurial capabilities, marketing capabilities, and marketing performance of medical centres and hospitals active in the health tourism industry. The findings make several contributions to the literature on health tourism, particularly in the areas of marketing and entrepreneurship. The research results also highlight the advantages of blockchain technology for managers and entrepreneurs in health tourism hospitals and firms.

The interaction of actor-independent and actor-dependent factors in new venture formation: The case of blockchain-enabled entrepreneurial firms

AbstractThe study seeks to explore how blockchain technology enables the creation of new ideas for ventures and to examine the activities of founders and entrepreneurial teams in shaping those ideas. We adopted several theoretical frameworks – external enablers theory, dynamic capabilities (DCs), and dynamic managerial capabilities (DMCs) – to explain the interaction of the actor-independent and actor-dependent factors in the process of new firm formation. We analysed four Hungarian blockchain start-ups that operate across financial services, cryptocurrency trading, crypto asset management, energy, information technology, and identity industries and create high value-added and cross-industrial offerings for Hungarian and foreign markets. Using qualitative study research results, the study develops the model of external enablers, founders' and firm capabilities and new venture creation. We identify three interconnected external enablers – namely, market volatility associated with the growing popularity of cryptocurrencies and the underlying blockchain technology, the properties of blockchain, and the ideology behind the technology – and discuss the role of entrepreneurs' DMCs and sensing and seizing activities in discovering and shaping these enablers into profitable business ideas.

An effectuation approach to sustainable entrepreneurship

Purpose This paper aims to explain the occurrence of sustainable entrepreneurship in the underresearched sub-Saharan Africa context and to improve the understanding of how effectuation manifests in this context. Design/methodology/approach This study uses a qualitative research approach based on multiple case studies. Responses were sourced from owners, employees, suppliers, the community and customers of sustainable entrepreneurial firms. Data collection methods included in-depth interviews, document reviews and observations. The Gioia analytical approach was used. Findings Overall, the authors find the concept of effectuation to be well-suited to capturing the processes through which individuals with limited means seek to engage in sustainable entrepreneurship. The authors also identify three pervasive practices that are key to understanding effectuation in the developing country context: complementation of indigenous knowledge with modern science, compassion and pluriactivity. Practical implications This study underscores the importance of co-creation, diversification of revenue sources and the role of emotional awareness and interpersonal skills in entrepreneurial endeavors. Originality/value This study, therefore, contributes new knowledge about the mechanisms through which entrepreneurs faced with resource constraints use control as opposed to prediction strategies to exploit sustainable entrepreneurship opportunities. In so doing, this study contributes to entrepreneurship theory by proposing the integration of cognitive and affective dimensions in realizing sustainable entrepreneurship goals.

Testing the waters: founding team composition and search heuristics in academic entrepreneurial ventures

Abstract Entrepreneurial action often stems from individual judgment about the value potential of market opportunities. Where entrepreneurs direct their search for and evaluate profitable opportunities has long received scholarly consideration. Attention has been increasingly directed toward how search is conducted, with a distinction between “cognitive” search, where actors are driven by a prior belief about the linkage between actions and outcomes (i.e., “learning-before-doing”) and “experiential search,” in which the solution must be realized through experimentation, trial-by-error, or “learning-by-doing.” We examine founders’ experiential search for market applications in uncertain technological environments. In doing so, we seek to uncover how founder background, experience, and depth of knowledge affect the firm’s degree of experiential search. We examine a sample of technology-oriented start-ups founded by researchers from six major US research universities to investigate the role of experiential search in university technology commercialization. In our context of academic entrepreneurship, we find that founding teams that draw from multiple disciplinary perspectives in selecting a market application to pursue exhibit a broader cognitive map of the technological landscape and thus expend more effort in the experiential search process than do teams with less varied backgrounds. Conversely, teams that include individuals with prior commercial experience conduct less experiential search, although this evidence is less strong. The inclusion of students appears to lead to greater experiential search by the founding team. Our findings add new understanding to the application of search heuristics by entrepreneurial firms in technology commercialization.

Mediating role of green innovation and moderating role of resource acquisition with firm age between green entrepreneurial orientation and performance of entrepreneurial firms

Mediating role of green innovation and moderating role of resource acquisition with firm age between green entrepreneurial orientation and performance of entrepreneurial firms

TANTANGAN DAN PELUANG SMK NEGERI JAGOI BABANG MENGEMBANGKAN SPIRIT KEWIRAUSAHAAN KEARIFAN LOKAL BIDAI PERBATASAN MALAYSIA INDONESIA KABUPATEN BENGKAYANG

The Indonesia-Malaysia border region has the potential for various natural and cultural resources. The development of entrepreneurial skills is critical, particularly for the younger generation, in order to improve the economic potential of the region near the Indonesia-Malaysia border. This study intends to examine the obstacles and opportunities experienced by students in fostering the entrepreneurial spirit of Bidai indigenous wisdom in Bengkayang Regency, Malaysia-Indonesia border. The qualitative research method was applied in this study. Data was gathered through conversations with students who had prior experience creating Bidai local wisdom entrepreneurial firms. Data analysis employs interactive data analysis techniques such as data reduction, data visualization, and conclusion or verification stages. According to the findings of the study, the problems that students encounter include a lack of funding to start a business, a lack of entrepreneurial knowledge and skills, and competition from imported products. Opportunities include the opportunity for cross-border markets with Malaysia, which expands opportunities for indigenous knowledge goods, as well as government and related organization support. This study's recommendations include enhancing students' entrepreneurial knowledge and skills, government assistance in getting financing and training, building effective marketing tactics, and forming partnerships with connected parties

Entrepreneurial Orientation Impact on the Innovation Ambidexterity: Evidence from the Industrial-Based Sector

Entrepreneurship, in many low-developed economies, plays an important role in defeating external distress. It is crucial in such situation that entrepreneurial firms resist and even grow. The purpose of this paper is to investigate how entrepreneurial orientation brings about organisational ambidexterity through the mediation role of intellectual capital in the context of a developing country. This paper reports research results combining a qualitative and quantitative evaluation. The exploratory study is based on qualitative case studies and in-depth interview data collected from 15 Tunisian small and medium enterprises (SMEs) in the industrial sector. Then, the methodology included a survey of 155 SMEs using a questionnaire and structural equation modelling analyses. The results reveal that SMEs leverage internal and external resources to pursue ambidexterity separately or simultaneously. The data were gathered from a sole informant from every firm. Consequently, more in-depth longitudinal study may be requisite to expand deeper insights into the used variables. SME managers need to focus on the specific barriers to ambidexterity and design effective mechanisms to advance the drivers of ambidexterity. The mechanisms to realize ambidexterity as branded in this study will assist SMEs in particular, and firms in general. A new shape of organisation is an open design allowing more outer acquaintance and resources to be riveted, which is claimed as a novel model for organisation. This study combined the concepts of entrepreneurial orientation and intellectual capital as the basis of innovation ambidexterity. Human, organisational and relational capitals are the intermediate mechanisms to explain the effect of entrepreneurial orientation. Moreover, the Tunisian specific context adds more novelty to this study.

Entrepreneurial leadership: Putting the “U” in team

Entrepreneurial firms, due to their size and limited resources, are at a significant disadvantage when it comes to attracting, hiring, and retaining top talent. These challenges place the firm’s survival and success in jeopardy, as they waste resources on talent management and operate amid talent shortfalls. Simply put, in the scale-up phase, managing talent could be the most important activity entrepreneurs pursue. While entrepreneurs cannot eliminate their strategic shortcomings (e.g., prestige, the ability to pay top salaries), they can take advantage of their unique strengths (e.g., a more intimate environment, job flexibility, and greater opportunities for growth, advancement, and leadership) to make themselves more competitive among candidates not necesarily destined for large corporations. In this article, drawing upon the lessons of best practice and theory, we make three recommendations for entrepreneurial hiring managers: (1) treat all prospective employees as transformative organizational members, (2) recognize and embrace the contributions of all, and (3) make new and established employees consistently feel valued. While these lessons allow all managers to display their organizational strengths, they provide the best return on investment for those with the greatest hiring challenges: entrepreneurs.

Family firm entrepreneurship: An experimental study

ABSTRACT Family managers’ entrepreneurial intentions (EI) play a crucial role in the long-term success of family firms. Previous research has highlighted education as a key driver of EI but has failed to consider the unique socialization processes within business families and their impact on the education-EI relationship. This study aims to fill this gap by examining the direct and indirect effects of education on family managers’ EI. By combining the integrated model of EI and research on business families’ socialization patterns, a study was conducted with a role-playing experimental design involving 412 family firm managers. The results indicate that entrepreneurial self-efficacy (ESE) serves as a mediator between education and EI, while the ESE-EI relationship is further mediated by risk perceptions. Interestingly, no direct effect of education on EI was found, suggesting that the influence of education on EI follows distinct patterns within business families.

Examining entrepreneurial successes and failures during the COVID-19 pandemic (2019–2023)

PurposeWhen entrepreneurship scholars and policy makers turned their attention to entrepreneurial ventures during the COVID-19 pandemic (2019–2023), its full effects on entrepreneurial firms and systems presented radically challenging questions and unresolved puzzles. In this paper, the authors shed light on these questions and puzzles with a large-scale empirical examination of the pandemic's overall effects on entrepreneurs, entrepreneurial firms, entrepreneurial environments and responses with a view toward success and failure over time.Design/methodology/approachThe authors adopt a broad exploratory approach and examine different perspectives to develop a deeper understanding of the COVID-19 pandemic's effects on entrepreneurs, entrepreneurial firms, entrepreneurial environments and responses especially regarding the success and failure of entrepreneurial ventures during the pandemic. Thus, the authors built a dataset with 10 survey waves from 2020 to 2021, with an average of 7,000 Brazilian entrepreneurial ventures (SMEs) in each wave of the survey. The authors used this data to examine their performance and survival.FindingsThe findings suggest that the increase of the COVID-19 virus contagion per se did not severely affect entrepreneurial ventures' performance and survival. However, the worsening of the COVID-19 pandemic did weaken entrepreneurial ventures' performance and survival. Moreover, the findings suggest that entrepreneur education has an inverted U-shaped relationship with entrepreneurial ventures performance. Indigenous, Brown and Black entrepreneurs experienced decreased entrepreneurial ventures survival compared to White entrepreneurs. While entrepreneurial ventures that adopted digital technologies and had access to loans increased their performance and survival during the COVID-19 pandemic, those who failed in these aspects experienced negative performance and survival effects. Thus, although the COVID-19 pandemic severely impacted many entrepreneurial ventures and even forced some to close, others survived and even prospered during the environmental shock.Originality/valueThe paper sheds light on a little understood topic: entrepreneurial venture success and failure in the COVID-19 pandemic.

Entrepreneurial Ecosystem and Tourism Firms' Survival in the COVID-19 Pandemic Crisis: A Case Study of Daklak Province, Vietnam

Purpose: This paper aims to analyze the entrepreneurial situation during the COVID-19 pandemic, focusing on firms in the tourism sector. Specifically, we seek to identify factors that belong to the Entrepreneurial Ecosystem (EE) of Dak Lak province, supporting entrepreneurial firms' survival during the COVID-19 pandemic. Theoretical framework: We applied the EE model developed by Isenberg (2011) to the province of Dak Lak, where we analyzed the effects of EE on the ability of new businesses in the community-based tourism sector to withstand the impact of the COVID-19 pandemic. Design/methodology/approach: We conducted a survey of 206 entrepreneurs, of whom 108 are entrepreneurs in the tourism sector or communities-based tourist destinations. These surveyed entrepreneurs participated in two startup contests the Dak Lak Province organized in 2018 and 2020. Findings: It was found that the COVID-19 pandemic particularly devastated small businesses in the travel and tourism sector. In addition, only two components of EE provide relief to these companies: FINANCE and CULTURE. Without a doubt, microcredit, loans, and debt refinancing funds, as well as the general liquidity of the financial market, help young businesses stay afloat. Additionally, the community's culture of risk-taking, failure acceptance, success-seeking, and lofty aspirations underpins their attempt to keep the business afloat during difficult times. Research, Practical & Social implications: We suggested that Dak Lak province develop its EE by upgrading its elements as soon as possible to cope with future crises. Originality/value: This study gives a new direction on the specific approach to improve the EE of a province of Vietnam and shows ways for better performance of the EE. Conclusion: We found that FINANCE and CULTURE components play a positive role in assisting early-stage tourism firms. Specifically, the availability and accessibility of the financial market, including micro-credit, support entrepreneurial firms in maintaining their operation. In addition, the culture of tolerance of risks and failure, efforts for success, and high ambition is the basis for the action of entrepreneurs to continue their businesses.